I’ve already advised you to prepare for higher interest rates, courtesy of the Federal Reserve, in 2015. However, one class of stocks has little to fear from the modest rate increases I foresee over the next 12 – 18 months. I’m talking about companies that can boost their dividends, over the long run, faster than the cost of living. By the end of the decade, in fact, I predict that many of these dividend growth stocks will trade considerably higher than today’s levels. Reason: Millions of retiring Baby Boomers will be flocking to income vehicles with proven, inflation-beating track records.
There’s just one fly in the salsa, though. Many dividend-growth stocks are expensive by historical standards. In other words, they feature skimpy yields going in. Fortunately, a handful of stocks today still combine good yields and strong growth prospects. Here are three dividend growth stocks to buy now: Abbott Laboratories (NYSE:ABT), Procter & Gamble Co (NYSE:PG) and Toronto-Dominion Bank (NYSE: TD).